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EXHIBIT 10.25
TRANSITION AGREEMENT AND STOCK PLEDGE
This Transition Agreement and Stock Pledge (this "Agreement") is made
as of January 9, 1998, by and between [RTSI SUBSIDIARY], a ________ corporation
("Management Services); [PROFESSIONAL CORPORATION], a ________ professional
corporation (the "PC"); and [SHAREHOLDERS] (the "Current Shareholders").
RECITALS
A. The PC and Management Services have entered into an Administrative
Services Agreement, effective ________ (the "ASA"), for the provision of certain
administrative and billing services to the PC in connection with the PC's
provision of radiation therapy services in __________ (the "State").
B. The Current Shareholders own all of the issued and outstanding
shares of the PC's stock.
C. The parties hereto believe it to be in their best interest to make
provision for the future disposition of all of the shares of the capital stock
of the PC whether currently issued and outstanding or issued at any time (the
"Shares").
D. The Current Shareholders may desire to issue or transfer Shares to
qualified shareholders satisfactory to and approved by Management Services
(together with the Current Shareholders the "Shareholders"), upon such
Shareholders becoming licensed to practice medicine in the State, and provided
that each or all, as applicable, execute an agreement in substantially the same
form as this Agreement.
D. The Current Shareholders desire to pledge the Shares to secure the
covenants made in this Agreement, and Management Services desires to accept such
security interest.
NOW, THEREFORE, for and in consideration of the mutual agreements,
terms, covenants and conditions contained herein and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties agree as follows:
1. Definitions.
1.1. "Shareholder Event of Transfer" means any one or more of
the following events:
(a) The transfer of any Shares by any Shareholder,
including any sale, assignment, conveyance, gift or any other form of
disposition or transfer, voluntary or involuntary, including transfers by
bequest or inheritance, without the approval by Management Services;
(b) Loss of a Shareholder's license to practice
radiation therapy in the State for any reason;
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(c) A Shareholder is adjudicated incompetent by any
court of law;
(d) A Shareholder becomes insolvent by reason of an
inability to pay debts as they mature; files a petition in bankruptcy,
reorganization or similar proceeding under the bankruptcy laws of the United
States or has such a petition filed against a Shareholder which is not
discharged within thirty (30) days; has a receiver or other custodian, permanent
or temporary, appointed for the business, assets or property of a Shareholder;
has bank accounts, property or accounts of a Shareholder's attached; has
execution levied against business or property of a Shareholder; makes an
assignment for the benefit of creditors; or a Shareholder has any Shares
attached or levied upon for the payment of debts;
(e) Any representation or covenant contained in this
Agreement is breached by a Shareholder; or
(f) For any reason a Shareholder no longer meets the
qualifications to be a shareholder of a professional corporation in the State.
provided, however, that the non-breaching Shareholders may cure a Shareholder
Event of Transfer by purchasing all of the Shares of a Shareholder who has
caused any of such Shareholder Events of Transfer to occur, within thirty (30)
days of such Event.
1.2 "PC Event of Transfer" means any one of the following
events:
(a) There is a Default (as hereinafter defined) under
the ASA by the PC which is not cured within any applicable cure periods stated
in the ASA; or
(b) Any representation or covenant contained in this
Agreement is breached by the PC.
1.3. "Transferee" means a physician licensed to practice
radiation therapy in the State, or a professional corporation qualified to
practice radiation therapy in the State, chosen by Management Services.
2. Grant of Security Interest. Each Shareholder grants to Management
Services a security interest in the Shares to secure the Shareholders's
obligations set forth in Section 3.
3. General Restriction on Transfer. No Shareholder shall sell,
transfer, encumber, pledge, will, or otherwise dispose of such Shareholder's
Shares, or allow such Shareholder's Shares to pass under the intestate laws or
by operation of law, except as provided in this Agreement. If any Shares or any
rights therein are transferred contrary to this Agreement, Management Services
retains a security interest in such Shares and in the proceeds of such
disposition.
4. Conditional Agreement to Transfer Stock. Except where the
non-breaching Shareholders cure a Shareholder Event of Transfer as provided in
Section 1.1 above, all
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Shareholders shall immediately transfer the Shares as set forth in this
Agreement for the Purchase Price set forth in Section 7 below upon the
occurrence of a PC Event of Transfer or upon the occurrence of a Shareholder
Event of Transfer.
5. Transfers by Shareholders. If a Shareholder Event of Transfer
occurs, then the PC and any Shareholder aware of such Shareholder Event of
Transfer, the Shareholder's legal representative or a lien creditor of the
Shareholder exercising its remedies with respect to such Shareholder (in any
case, the "Transferring Shareholder") shall give the PC, Management Services and
each of the other Shareholders written notice thereof (the "Notice").
5.1 During the period commencing on the date the Notice is
given and ending thirty (30) days thereafter (the "Shareholders' Option
Period"), the Shareholders other than the Transferring Shareholder shall, in
relative proportion to the respective ownership of Shares of such Shareholders
who desire to exercise their option, have the exclusive right (but not the
obligation) to acquire all or a portion of the Transferring Shareholders's
Shares at the pro rata Purchase Price determined pursuant to Section 7 hereof.
Said Shareholders may exercise this option by delivering, within the
Shareholders' Option Period, to the Transferring Shareholder, Management
Services and the PC a writing stating that said Shareholders have elected to
acquire all or such specified number or proportion of the Transferring
Shareholder's Shares not later than ninety (90) days after the date of the
Notice. If not all Shareholders (other than the Transferring Shareholder) elect
to acquire the Transferring Shareholders's Shares, the Shareholders that have
elected to acquire the Transferring Shareholders's Shares may acquire the
Transferring Shareholders's Shares in relative proportion to their respective
ownership of Shares (not counting Shares held by the Transferring Shareholder or
by Shareholders who have not elected to acquire the Transferring Shareholders's
Shares).
5.2 If the Shareholders's Option Period shall have expired
without the election by any of the Shareholders to acquire any and all of the
Transferring Shareholders's Shares, then, for a period of thirty (30) days
commencing thirty-one (31) days after the date of the Notice (the "PC Option
Period"), the PC shall have the exclusive right (but not the obligation) to
acquire all or a portion the Transferring Shareholders's Shares at the pro rata
Purchase Price. The PC may exercise its option by delivering, within the PC
Option Period, to each of the Shareholders and Management Services a writing
stating that the PC has elected to acquire all or such specified number or
proportion of the Transferring Shareholder's Shares no later than ninety (90)
days after the date of the Notice.
5.3 If, but only if, the Shareholders's Option Period and the
PC Option Period shall have expired without the election by any of the
Shareholders other than the Transferring Shareholder or the PC to acquire all of
a Transferring Shareholders's Shares, then Management Services shall designate a
Transferee to purchase the Shares which are not being purchased pursuant to
Sections 5.1 and 5.2 above.
6. Transfer on PC Event of Transfer. If a PC Event of Transfer occurs,
Management Services shall designate a Transferee to purchase all of the Shares
of the
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PC within thirty (30) days of Management Services's discovery of the occurrence
of a PC Event of Transfer.
7. Payment of Purchase Price. The purchase price for any transfer of
the Shares (the "Purchase Price") shall be an amount equal to the fair market
value of the Shares as of the date of the transfer, determined by the accounting
firm of PricewaterhouseCoopers, LLP (or any successor thereto) acting through
the personnel at its office in Tampa, Florida, if that firm is willing to make
the determination; or, if not, any nationally recognized firm of independent
certified public accountants agreed to by Management Services and the PC. Any
determination of the fair market value of the Shares by such firm shall be
deemed a final determination of the fair market value as of the determination
date and shall be conclusive upon all parties for purposes of this Agreement as
a commercially reasonable price. The Purchase Price shall be payable in cash, by
cashier's check, or by a promissory note within thirty (30) days after receipt
of the accounting firm's Purchase Price determination. If payment is made by a
promissory note, such note shall be payable over three (3) years in equal
monthly installments of principal and interest and shall bear interest at the
rate of eight percent (8%) per annum.
8. Commercially Reasonable Disposition. The parties acknowledge that it
would be impossible to realize a commercially reasonable price in the event of
the disposition of the pledged stock by public sale and very difficult to do so
by private sale, except on the terms and conditions set forth herein. Therefore,
the parties acknowledge that a disposition of the Shares pursuant to the terms
of this Agreement is a commercially reasonable disposition. The parties further
acknowledge and agree that the determination of the Purchase Price under Section
7 is a commercially reasonable method of determining the Purchase Price and that
they will be bound by such Purchase Price determination.
9. Term. This Agreement shall continue for as long as the ASA and any
renewals thereof are in effect.
10. Representations and Warranties. PC and each of the Shareholders
represent and warrant the following:
10.1. No Contravention. There is no provision of any agreement
to which PC or any Shareholder is a party or of any law that would be
contravened by the execution, delivery, or performance of this Agreement. The PC
and each Shareholder's name and the information contained in the Recitals hereto
are correct. There are no outstanding or authorized options, warrants, purchase
rights, subscription rights, conversion rights, exchange rights, or other
contracts or commitments that could require the PC to issue, sell, or otherwise
cause to become outstanding any of its capital stock. There is no litigation nor
are there any proceedings by any public body, agency, or authority presently
pending or threatened against the PC or any Shareholder, the outcome of which
might materially and adversely affect the continued operations of the PC.
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10.2. Shares. Each Shareholder has good title, free and clear
of all claims, charges, liens, encumbrances, restrictions, options, calls and
defects of any kind or nature whatsoever, except for the security interest
granted hereby; no other person, entity, or governmental authority has or claims
any lien or other interest in the Shares; no adverse financing statements are on
file; and there is no litigation nor are there any proceedings by any public
body, agency, or authority presently pending or threatened against any
Shareholder, the outcome of which might materially and adversely affect the
Collateral.
10.3. Survival of Representations and Warranties. All
representations and warranties shall survive the execution and delivery of this
Agreement.
11. Affirmative Covenants.
11.1. Application to Future Shares. This Agreement shall apply
to all Shares now owned or hereafter acquired whether such acquisition be the
result of purchase, stock dividend, split-up, recapitalization or issuance by
the PC of additional shares of capital stock.
11.2 No Agency and Defense Against Claims. Nothing in this
Agreement shall make any Shareholder an agent of Management Services for any
purpose whatsoever. Each Shareholder shall defend the Shares against all claims,
demands, and defenses affecting Management Services's security interest,
regardless of merit, and shall hold Management Services harmless therefrom,
including, without limitation, holding Management Services harmless from all
attorneys' fees and other litigation expenses arising out of any such claims,
demands, or defenses.
11.3. Disposition and Issuances of the PC's Common Stock. The
PC shall not, and during the term of this Agreement each Shareholder shall not
cause the PC to issue, sell or otherwise cause to be outstanding any additional
capital stock, except for (a) sales of such stock made to approved Shareholders;
(b) the transfer without consideration of any of the Shares to a revocable trust
created by a Shareholder, provided that any and all trustees of such trust first
agrees in writing to hold Shares so transferred subject to this Agreement; and
(c) the transfer of Shares to the Transferee as provided herein.
12. Custody and Handling of Collateral and Records.
12.1. Protection of Secured Party's Security Interest. Upon
execution of this Agreement, each Shareholder shall give Management Services the
certificate(s) representing such Shareholder's Shares duly endorsed in blank or,
if not endorsed in blank, each Shareholder shall give Management Services a duly
executed stock power in blank.
12.2 Restrictive Legend. Each certificate representing Shares
of the PC shall be marked with a legend substantially in the following form:
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The right to sell, transfer or encumber the shares
represented by this certificate is restricted under
the terms of an Agreement dated ____________, to
which the PC is a party. The PC will mail a copy of
said Agreement to any shareholder without charge
within five (5) days after receipt of written request
therefore.
13. Default and Remedies.
13.1. Remedies Upon Default. Upon the occurrence of any breach
of any covenant or warranty contained in this Agreement ("Default") by the PC or
any or all of the Shareholders and continuously thereafter until waived in
writing, any of the parties hereto not in breach of this Agreement shall have
the right and option to immediately send notice to all parties hereto of a
Shareholder Event of Transfer or a PC Event of Transfer, as applicable, to cause
a transfer of Shares pursuant to Section 5 or Section 6 hereof, subject to a
subsequent determination of the Purchase Price. In the event of a Default,
Management Services may exercise any other remedy available to Management
Services as a secured party under law or equity. Management Services shall be
entitled upon any breach or threatened breach of this Agreement to the granting
of a temporary restraining order, a temporary or permanent injunction, or any
other equitable remedy which may then be available without further notice.
13.2. Construction of Rights and Remedies and Waiver of Notice
and Consent.
(a) This Section 13 applies to all rights and
remedies provided by this Agreement or at law or in equity.
(b) No forbearance in exercising any right or remedy
shall operate as a waiver thereof; no forbearance in exercising any right or
remedy on any one or more occasions shall operate as a waiver thereof on any
future occasion; and no single or partial exercise of any right or remedy shall
preclude any other exercise thereof or the exercise of any other right or
remedy.
14. Miscellaneous.
14.1. Notices. If at any time after the execution of this
Agreement, it shall become necessary or convenient for one of the parties to
serve any notice, demand or communication upon the other parties, such notice,
demand, or communication shall be in writing and shall be served personally, by
nationally recognized overnight courier which provides confirmation of delivery,
or by depositing the same in the United States mail, registered or certified,
return receipt requested, postage prepaid and to such address as each party may
have furnished to the other parties in writing as the place for the service of
notice. Any notice so mailed shall be deemed to have been given three (3) days
after the same has been deposited in the United States mail; when delivered if
the same has been given personally; or the next business day if the same has
been delivered to a nationally recognized overnight courier service.
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14.2. Governing Law. This Agreement shall be construed and
interpreted under the laws of the state of Florida.
14.3. Binding Effect. This Agreement shall be binding upon the
PC, each Shareholder, the Shareholders' personal representatives, heirs,
successors, and assigns, as the case may be, and shall be binding upon and inure
to the benefit of Management Services and its successors and assigns. Neither
the PC nor any Shareholder may assign this Agreement.
14.4. Amendment. This Agreement may be amended, but only by a
written amendment signed by all parties hereto.
14.5. Severability. If any provision of this Agreement or the
application of any provision to any party or circumstance shall be adjudged
invalid or unenforceable to any extent, the remainder of this Agreement and the
application of the provision to any other party or circumstance shall not be
affected thereby. Each provision of this Agreement shall be valid and
enforceable to the fullest extent permitted by law.
14.6. Headings. The headings in this Agreement are for
convenience of reference only and shall not be used in interpreting this
Agreement.
14.7. Number; Gender. Where appropriate, the number of all
words in this Agreement shall be both singular and plural and the gender of all
pronouns shall be masculine, feminine, neuter, or any combination thereof.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first set forth above.
"PC"
[PROFESSIONAL CORPORATION]
By:
--------------------------------
Its:
-------------------------------
"Management Services"
[RTSI Subsidiary]
By:
--------------------------------
Its:
-------------------------------
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"Current Shareholders"
______________________________________
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______________________________________
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